Blockchain technology utilizes a distributed digital ledger to record and track information, and can be leveraged to gain transparency and certainty in transactions ranging from cryptocurrency to supply chain tracking. This blog provides information on the legal developments surrounding implementation of blockchain technology, with an initial focus on the financial services sector.
Recent SEC enforcement action found that a digital token operated as an unregistered securities exchange. In a settlement, the token's founder agreed to disgorgement of $313,000 and a penalty of $75,000.
The SEC has launched a portal on its website to act as a clearinghouse for fintech related information.
On September 27, 2018, the Commodity Futures Trading Commission sued 1Pool Ltd. and Patrick Brunner for offering illegal leveraged, off-exchange commodity transactions to retail customers in the United States.
On September 21, 2018, Congressman Tom Emmer (R-MN), co-chair of the Congressional Blockchain Caucus, announced his plans to introduce three pieces of legislation designed to support the use and development of blockchain technology in the United States.
In case the intrepid and hardy souls bravely blazing entrepreneurial paths in the New World of virtual currencies do not have enough regulatory hazards to navigate, one few seem to have considered to date is the possible application of the Model State Commodity Code (“Model Code”). Depending on how its thirty-three year old provisions are interpreted, the Model Code’s prohibition on the sale of commodities for speculative or investments may possibly be applied to some virtual currency businesses.
If 2017 was the year of the ICO, then 2018 may become the year of the cryptocurrency investigation